Amazon building facility in Tracy

Saturday

Nov 24, 2012 at 12:01 AM

TRACY - Graders are already moving earth for an Amazon distribution and fulfillment center in Tracy that when complete will employ 1,000 people and contribute about $1 million in tax revenue each year to the city, Tracy Mayor Brent Ives said Friday.

Dana M. Nichols

TRACY - Graders are already moving earth for an Amazon distribution and fulfillment center in Tracy that when complete will employ 1,000 people and contribute about $1 million in tax revenue each year to the city, Tracy Mayor Brent Ives said Friday.

Ives, speaking by phone from his home, where he was making turkey soup, said the center is the culmination of years of work by Tracy officials to prepare industrial sites for the "new economy."

"It is certainly one of the biggest wins not just for Tracy but for the whole county," Ives said. "I couldn't be more excited about it."

Amazon has announced a number of new distribution centers in California since state lawmakers last year agreed to give the company a one-year reprieve from collecting sales tax if the company agreed to build distribution centers here.

One of those centers is already under construction 20 miles south of Tracy in Patterson.

Ives said there are differences between the Patterson distribution center and the one in Tracy. He said the Patterson center focuses more on bulk distribution, while the one in Tracy will make use of advanced robotics and offer better-paying jobs.

The new Amazon center in Tracy will rise on 70 acres in the city's Northeast Industrial Area. Prologis Logistics is the developer and future landlord for the Amazon operation.

Neither Amazon nor Prologis representatives responded Friday to telephone messages asking for comment. Amazon is based in Seattle; Prologis in San Francisco.

The Tracy City Council in May unanimously approved a final development plan for more than 1 million square feet on the site.

And in December, the council also agreed to a tax-sharing arrangement that also was intended to encourage Amazon to come here, although city officials say Amazon representatives had not yet acknowledged whom they were working for at that time.

"They just wouldn't tell us who they were. We knew who they were," Ives said. "They gave us examples of Amazon projects elsewhere."

The tax-sharing arrangement applies to any project - whether Amazon or not - offering 1,000 jobs and generating $100 million a year in sales, Ives said.

The policy, approved during a special meeting Dec. 21, expanded the city's existing incentive program for retailers. Under the new policy, city staff is authorized to negotiate such incentive programs with industrial and office project developers as well.

The policy specifies that the projects must have more than $100 million in annual sales and 1,000 employees but does not specify the value of the incentives city staff will offer to developers.

The incentives are, in general, partial sales tax rebates for a limited time. The city policy specifies that even with incentives, the project must yield a net financial benefit to the city.

Ives said Amazon representatives told him to expect at least $100 million in annual sales from the site. He said the center will be operating in time for the 2013 holiday season.

Ives said the Amazon deal could be signed and formally announced as soon as next week. Meanwhile, word of it was already spreading through the region's business community and brightening the holiday mood.

"A thousand-job project - that is large, much larger than most distribution centers," said Jeff Michael, director of the Business Forecasting Center at University of the Pacific in Stockton.

"That's the kind of project that's large enough that you can feel it in a community," Michael said. "It certainly is a welcomed development and another sign of our fledgling recovery."

The Amazon deal may be followed by other good news, Ives said. He said another large project, which he would not disclose, is in negotiations. And he credited City Council members for working hard over several years to prepare infrastructure and reach out to potential businesses.

"The city of Tracy has been preparing for these kinds of projects for five years," Ives said. "We have just entitled 1,700 more acres for commercial industrial property."

That 1,700 acres is to the west, on the opposite end of town from the Amazon site.

"We want to be prepared for the new economy before it comes," Ives said. "This is just the beginning."